The value of the selling relationship
The latest Ernst & Young report signals ten years of slow growth austerity in the UK market
The latest Ernst & Young report signals ten years of slow growth austerity in the UK market, quoting depressed wage growth coupled with rising inflation, shortage of credit and rising commodity prices. This is likely to make consumers even more cautious, says Brian Moore
The future of relationship selling in the NAM (national account manager) role is very important when dealing with savvy C&T buyers. The obsession with results in this unprecedented climate may have to make way for evaluating how important this selling relationship has become.
While we have all moved on from Arthur Miller’s creation of the ultimate salesman who ended up worth more dead than alive in his classic Death of a Salesman, it has to be asked whether the fixation with getting results has replaced the value of relationship selling which should be of equal importance.
When C&T brands came in various forms in terms of product, price, presentation and place and were made available to a non-savvy public in clearly defined and standardised C&T retail environments, with what we call Resale Price Maintenance ensuring the absence of unseemly price competition, then relationship selling made the only difference.
In other words, getting to know and understand the C&T buyer, in terms of their sports preferences and leisure pursuits, virtually guaranteed the initial order and steady repeat business.
Getting through to the buyer
However, with buyers now constantly distracted by meetings, emails and 24/7 fire fighting, a NAM trying to establish and maintain a personal trading relationship could appear to be attempting to introduce an unnecessary indulgence to the C&T buying/selling process.
Even getting buyers’ attention is impossible nowadays unless they can quickly see that the NAM’s offering can be a means of helping them do the job faster, more effectively or at less cost in terms of money and effort. Moreover, with many C&T customers introducing rapid buyer churn in order to reduce supplier/retailer interaction to a series of price haggles in a search of the best deal, NAMs might be forgiven for thinking that relationship selling no longer has a part to play in today’s account management.
While all aspects of the trading relationship have become more complex, are heavily numbers-based and usually come in a package that is required to be defensible, if not transparent, the NAM’s primary role is now focused on highly specific tailor making to customer needs.
Building a strong commercial case
This involves a detailed analysis of the customer’s financials, if only to determine how the global economic crisis has impacted their relative profitability. It is imperative that a C&T supplier’s customers are all assessed financially and compared with one another in order to identify those that are likely to go bust. While the NAM needs to monitor a specific customer’s results, someone in the organisation should be downloading customers’ annual reports to cross reference relative performance via the key ratios. Any company attempting to trade with major C&T customers without such insight is now operating under grave risk. For instance, if a supplier that has a 5% net profit before tax has a customer go bust owing the supplier t150k, then the supplier will need incremental sales of t3m to recover the loss.
Reshaping the C&T product offering to emphasise its potential impact on customer profitability provides a way of capturing and then holding the attention of even the most distracted C&T buyer, whose constant unspoken question is ‘what’s in it for me?’.
The new savvy buyer
In the old pre-crisis days the C&T buyer had little interest in finance other than margins and incremental sales, but those that survived are now much more aware of the link between their
Return On Capital Employed (ROCE) and the value of their share options. They are therefore more responsive to, and critical of, a finance based pitch.
They are interested in meeting their own targets within the organisation and will more readily connect with those NAMs that can be trusted to help via an integrated service package that optimises their retail resources. If there’s one benefit of rapid buyer churn, it’s probably that today’s buyer isn’t distracted by the details of the C&T category. The buyer simply has to rely upon the NAM to integrate those details and deliver the optimum profit package for them.
Relationship selling has moved onto a new level and can only work on a fact-based foundation. Meeting the buyer’s job or functional needs is no longer sufficient in a highly competitive market. The NAM has to be able to satisfy the buyer’s deeper motivations and deliver a tailored commercial package, better than the competition. The integrity of the NAM then become more important than checking for technical competence in a dynamic buyer/seller relationship nowadays.
A C&T NAM that can work from the big picture of a market in turmoil and translate the insights into clear easy-to-follow and relevant pointers for the buyer will get attention.
The NAM thus becomes one of the select circle of a buyer’s valued trade partners that have to be rewarded with fair share dealings, leaving all the others to scramble for crumbs at transaction level where they may well lose out.